Meesho announces ESOP buyback of Rs 200 crore; likely to benefit 1,700 employees

Meesho, the low price e-commerce platform, announced its fourth and largest Employee Stock Ownership Plan (ESOP) buyback programme of Rs 200 crore (around $25 million) on March 13. The exercise is likely to benefit 1,700 employees across levels from junior positions to senior leaders, including current and past employees.

Until a few years ago ESOPs had little value but a slew of new-age IPOs from Zomato to Paytm to Delhivery and others has changed that perception in employees’ minds. Since 2021, ESOPs have gained traction and ESOP cashouts have led to $1.46 billion of wealth in the hands of startup employees since the beginning of 2021, according to data from Qapita. This was despite a 62 percent drop in cashout events in 2023.

Over the years, an increasing number of new-age companies, like PhonePe, Swiggy and others, have been rewarding employees with ESOPs and buying them back at a lucrative price, which eventually generates wealth for employees, especially the ones who joined an organisation early.

For SoftBank-backed Meesho, this is the fourth ESOP buyback programme. It first started buying back shares from employees in February 2020. While that was a small $1 million exercise, the total amount later increased as the company grew. In November 2020, Meesho bought back shares worth $5 million and then slightly increased the total size to $5.5 million in October 2021, according to data shared by the company.